Escrow
To finalize the sale of property a neutral, third party (a.k.a. escrow officer) is engaged to assure the transaction will close properly and on time. The escrow officer is paid equally by the buyer and seller to ensure that all terms and conditions of the purchase and sale agreement are met prior to the sale being finalized, including receiving funds and documents, completing required forms, and obtaining the release documents for any loans or liens that have been paid off with the transaction, assuring clear title to the property before the purchase price is fully paid.

Upon completion of all instructions of the escrow, closing can take place. The escrow officer will make an appointment with each party several days before the closing date to have all relevant documents signed and notarized, and to collect all outstanding payments and fees, including any remaining downpayment as well as closing costs such as title insurance, inspections, and/or real estate commissions.  On the day of closing, the officer will ensure that documents are recorded, funds are disbersed, and title to the property is transferred from seller to buyer.

Mortgage Escrow Account

While they share the name "escrow," a Mortgage Escrow Account is a separate entity entirely from the escrow office that closes your transaction.  A Mortgage Escrow Account is a special account often established by a lender to ensure payment on-going expenses such as property taxes, hazard insurance, and private mortgage insurance. Generally, this Escrow Account is partially funded at closing through the buyer's closing costs, and the home buyer makes on-going contributions through their monthly mortgage payment.